Tax law changes latest snag in Wonder Falls project, developer says

Local News

While some state lawmakers have given up hope on the much-anticipated Wonder Falls resort project in Niagara Falls, both state officials and Uniland, the developer, contend that the project is still very much alive.

The estimated $150 million rebuild of the Rainbow Centre Mall in Niagara Falls into a large hotel and indoor water park was billed by Gov. Andrew Cuomo in 2014 as transformational for tourism in a city that desperately needs a year-round attraction. But almost five years later, nothing has happened in public.

No shovels-in-the-ground ceremonies.

No press conferences with clapping dignitaries.

News 4 Investigates has learned that the state and Uniland are still trying to work through financing the project, but also that a new wrench has been thrown at them.

President Donald Trump’s Tax Cuts and Jobs Act of 2017 now requires many state and local tax incentives, grants and loans be marked as income to the recipients – in this case the developer – when filing federal taxes.

“When we were moving forward with the Wonder Falls project it was with the expectation that the full amount of assistance that the state would give us would be used toward capital costs,” said Jill Pawlik, Uniland spokesperson. “But due to the tax reform bill, all assistance is now recognized as income and therefore it’s subject to federal income tax.”

Pawlik said the tax issue is having a “very significant financial impact” on the project, and that Uniland is still in the process of working that out.

“We are working on strategies to mitigate the effect of that issue.”

The amount of financial assistance committed to the project under the state’s Buffalo Billion initiative, which was launched by Cuomo in 2012, has not been disclosed publicly.

“ESD and Uniland are discussing the structure of the state assistance that has been previously allocated for this public private partnership; Uniland is currently working through these,” Empire State Development (ESD) said in a prepared statement.

“We are awaiting Uniland’s response to our March 2019 request for an updated milestone schedule.”

In the meantime, the wait for something of substance to happen has some state lawmakers frustrated.

“My speculation is the $150 million estimated project is at a dead standstill,” said Angelo Morinello, a republican state assemblyman representing Niagara Falls.

“I do not see it going forward.”

Morinello isn’t alone in thinking the project is going nowhere fast.

“The fact that they haven’t done it tells me that’s never going to happen,” said Senator Robert Ortt, R- North Tonawanda.

“Certainly not in the way that it was sold to the public back in 2014, I will also note, an election year.”

Niagara Falls developments

Until recently, tourists to Niagara Falls didn’t have many choices to stay without crossing the border. Since 2016, the DoubleTree by Hilton on Buffalo Avenue, Courtyard by Marriott Hotel on Buffalo Avenue and the Hyatt Place on Rainbow Boulevard have been constructed with the help of local and state incentives.

But none has a family attraction like an indoor water park, which exists across the border in Canada.

“Niagara Falls specifically is in desperate need of a family attraction,” Ortt said. “I’m not taking my kids to the casino. They need something, a water park, some family attraction because families are the ones who stay places for three and four and five days and that’s what we need here.”

Both Ortt and Morinello said the lack of updates and information on Wonder Falls is frustrating.

“I think it was too ambitious for the timing,” Morinello said. “When you look at a $150 million project and then you realize the loan amortization, the interest payments, the maintenance, you need a certain number of individuals to come and support it. We do not have that type of movement in Niagara Falls.”

Limited information 

Cuomo and his economic development czar, Howard Zemsky, visited Niagara Falls in 2014 to announce the project: a 300-room hotel at 15 stories high, with a spa, indoor water park and other family entertainment.

Zemsky said the project “transforms a site that was an eyesore in downtown Niagara Falls for over a decade.”

In 2015, Uniland officials met with Niagara Falls City Council to update it on the evolving project but never gave a construction timeline, saying that it is too “unpredictable.” 

They needed to find a new partner for the water park and secure financing, while working out details with the state on funding.

A Uniland representative said they remain at the table with state officials.

“We understand more than anyone how long this process is taking and we are committed to seeing it through,” said Jill Pawlik, Uniland’s senior marketing manager.

“We agreed to an ambitious and transformative concept for the future of Niagara Falls tourism and we want it to be successful for all parties involved. We continue to work with ESD on bringing the concept to life.”

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